Inslee considers raising minimum wage for state workers

WASHINGTON — Gov. Jay Inslee said Friday his administration is considering raising the minimum wage for state workers and contractors, a decision he believes he could — but has not yet decided to — implement through executive order.

In January, Inslee publicly called for raising the statewide minimum wage of $9.32 an hour by as much as $2.50 an hour. But Inslee’s comment Friday was the first indication he may be prepared to act on the matter on behalf of state employees and contractors.

Inslee spoke outside the White House, where he and a dozen Democratic governors stepped out of a morning meeting with President Obama and Vice President Joe Biden.

Inslee was responding to a question about how he might use his executive power to advance the minimum-wage issue and other Democratic “opportunity agenda” priorities heading into the 2014 midterm elections.

Inslee said he recently ordered the state Office of Financial Management to analyze the potential fiscal impact of higher wages on the state’s $6.2 billion annual payroll. He would not say how big of a pay bump he had in mind.

During a telephone conference call later with Washington reporters, Inslee said he believed he had executive authority to act even without the Legislature’s backing.

Nonetheless, he said, “we want to talk to legislators because this obviously has some budgetary impacts. You may be able to do this just through an executive order, but ultimately you need a way to finance all this.”

Janelle Guthrie, spokeswoman for Washington Attorney General Bob Ferguson, said a governor “has significant authority to issue executive orders.” At the same time, the attorney general’s office in the past has ruled that governors have limited power to issue directives that have the force of law.

In January, Seattle Mayor Ed Murray issued an executive order to raise all city workers’ salaries to $15 an hour. He’s now working with the City Council to implement that, and it’s unclear when it would take effect.

A bill pending in Olympia would raise the minimum wage to $12 an hour over three years, although there isn’t much evidence yet the legislation will move this session. Democrats in Congress also are pushing to raise the federal minimum wage to $10.10 an hour, but those efforts have stalled in the face of Republican opposition.

At the White House, Inslee and his fellow governors repeatedly made a case for revving the economy by putting more money in workers’ pockets.

“Prosperity doesn’t trickle down from the top. It never has,” said Gov. Martin O’Malley, of Maryland, who is pushing a bill to increase his state’s minimum wage to $10.10 an hour from $7.25 an hour.

Inslee said low wages have been a “drag” on Washington’s economy despite the presence of Boeing, Microsoft, Amazon and other highflying employers.

“It should be self evident that if you work 40 hours a week, you should be able to feed your family and not be on public assistance” Inslee said.

Inslee said it would take his office several months to conduct an evaluation. He said he would take no action before the current legislative session ends March 13.

The number of potentially affected workers and contractors are unknown. Half of state employees, excluding those working in higher education, make more than $49,000 a year in base salaries. A full-time worker earning the current minimum wage makes $19,385 a year.

Still, even at $12 an hour, pay increases for the lowest-paid state workers likely would mean a small pinch to the state’s budget. According to rough, earlier fiscal analysis on the minimum-wage bill, direct payroll increases and attendant costs for Medicare, Social Security and pension contributions may range up to $6 million a year — less than one-tenth of 1 percent of the current payroll. Student workers at state universities were expected to account for two-thirds of the added costs.

A far bigger expense, however, would come from higher pay rates for outside contractors and vendors. For instance, it’s estimated that a $12-an-hour minimum wage could cost the state tens of millions of extra dollars a year for aides and others in nursing homes, assisted-living centers and elsewhere who look after residents receiving taxpayer-funded care.

But capturing the full scope of the ripple effect of higher minimum wages will be difficult. The state estimates, for instance, that raising the wage to $12 an hour would save the state nearly $27 million a year in reduced welfare benefits.